Singapore flag Singapore: Economic and Political Overview

The economic context of Singapore

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Singapore's economy is characterised by excellent finances and a high degree of openness, with the country being highly dependent on international trade. However, GDP only grew 1.3% in 2019, the worst the slowdown in 10 years at the time, mainly due to the trade war between the US and China and to a cyclical global downturn in the electronic sector. Due to the COVID-19 pandemic, the country registered a negative GDP growth of -5.4% in 2020 before a strong rebound at +7.6% in 2021 and a slow down at 3% in 2021. The latest IMF forecast is expecting a 2.3% rate in 2023 and 2.6% in 2024, subject to the post-pandemic global economic recovery. Growth factors include Singapore business-friendly regulatory system, 184.8% of GDP in exports and domestic demand.

The country's government balance dived to -7.9% of GDP due to the impact of the COVID-19 pandemic on public spending, before a come back to -2.3% in 2021 and -0,5% in 2022. It is expected to remain at -0.5% in 2023 and to come back in positive territory at +0.6% in 2024 (IMF, October 2022). Singapore's gross debt remained high at 159.9% and 141.1% of GDP in 2021 and 2022, and is projected to remain at 140% in 2023 and 139.9% in 2024. While public debt is high, financial assets held by the country more than compensate for it.  Inflation was negative in 2020 (-0.2%) before reaching 2.3% in 2021 and 5.5% in 2022. The IMF is forecasting inflation of 3% in 2023 and 2% in 2024. The Monetary Authority of Singapore is expected to maintain its policy in 2023. Economic challenges include slower exports due to Chinese economic slowdown, the U.S.-China trade war, decreasing global demand for electronics (19.7% of exports), a lagging construction sector, and a tight monetary policy, according to Coface.

Although per capita wealth in Singapore is amongst the highest in the region, unemployment has appeared due to structural economic changes (outsourcing of low-skilled work) and the COVID-19 crisis. Singapore’s annual average unemployment rate reached 2.7% in 2021 and 2.1% in 2022, and is expected to remain at 2.1% in 2023 and 2024 (IMF, October 2022). Singapore ranked the best country in the world in human capital development in 2021 (World Bank, 2022). Social challenges include rising income inequality and social discontent caused by overpopulation, high competition for employment and housing, lack of skilled labour, an ageing population, and distrust towards immigration.

In 2023, the country’s most immediate challenge will be to navigate the volatile international context, facing steep challenges against a backdrop of the persistent health and economic overhang of a global pandemic and a war in Europe, a cost-of-living crisis caused by persistent and broadening inflation pressures, and the slowdown in China.

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 466.79497.35520.97547.32573.15
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 82,80887,88491,72895,92399,984
General Government Balance (in % of GDP) -
General Government Gross Debt (in % of GDP) 167.5167.9168.3168.8169.3
Inflation Rate (%) n/a5.
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) 90.2482.5679.2079.9280.03
Current Account (in % of GDP) 19.316.615.214.614.0

Source: IMF – World Economic Outlook Database, October 2021

Main Sectors of Industry

Singapore's economy is based on electronics, petrochemicals, trade, finance, and business services. The agricultural sector is almost non-existent except for cultivation of orchids, vegetables and fish for aquariums. Its contribution to GDP (close to 0%) and employment (close to 0%) is negligible (World Bank, 2023), although the country intends to increase food resilience by developing a new aquaculture centre. The sector is registering regular growth rates since 2019. Singapore does not have mineral resources.

Singapore's economy is highly industrialised. The industrial sector represented 24.9% of GDP and employed over 15% of the active population in 2022 (World Bank, 2023). Electronics and petrochemicals dominate the industry, which also includes biomedical sciences, logistics, and transport engineering (GuideMe Singapore).

The services sector contributed over 70% of GDP and employed over 84.1% of the active population in 2022 (World Bank, 2023). It is dominated by trade, business services, transportation, communications and financial services. As a regional commercial hub, the Port of Singapore is one of the most important in the world. It ranks second in total volume of container transshipment traffic after Hong Kong. The growth in transport and storage services, health and social services sectors did not compensate the decline in the recreation and personal services, and the education services.

Global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades. The cost-of-living crisis, tightening financial conditions in most regions, Russia’s invasion of Ukraine, and the lingering COVID-19 pandemic all weigh heavily on the outlook.  Global growth is forecast to slow from 6.0 percent in 2021 to 3.2 percent in 2022 and 2.7 percent in 2023, the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the COVID-19 pandemic. Global inflation is forecast to rise from 4.7 percent in 2021 to 8.8 percent in 2022 but to decline to 6.5 percent in 2023 and to 4.1 percent by 2024 (International Monetary Fund - IMF, 2023). The impact of the 2022 world events appears to have affected both sides of most sectors and markets in this country for the third year in a row - demand disruptions having run up against supply problems - making the short-term outlook uncertain for agriculture, industry and service sectors.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 0.3 14.4 85.3
Value Added (in % of GDP) 0.0 24.2 70.9
Value Added (Annual % Change) -7.7 2.9 4.6

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.


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Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Business environment ranking


The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

World Rank:

Source: The Economist Intelligence Unit - Business Environment Rankings 2021-2025


Country Risk

See the country risk analysis provided by Coface.

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Latest Update: November 2023

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